Direct Marketing News (DMN): Our main feature for the upcoming February issue examines the many missed opportunities in email marketing. Can you discuss some of the ways marketers miss the ball when it comes to targeting consumers via email?

Jeff Nicholson (Pitney Bowes): Marketers have a perception that email is free, which is understandable when you think of its price in contrast with other channels. When you look at direct mail and telemarketing, it does appear to be free. The problem is, when a new customer comes into your remit, everyone wants a piece of them and everyone bombards them with messages. This is why you're seeing opt-out rates explode. If we do the analysis, we see that the top two drivers of opt-out are frequency and relevancy.

DMN: How costly can missed opportunities or mistakes be on email?

Nicholson: I'm engaged with a number of CMOs on that topic. Most organizations right now are being challenged to grow their customer base and improve profitability of campaigns. Why are the cross-sell rates not as high as they should be? If you look at the number of customers they have versus the number of customers they can speak to, it's a different number. For one of our clients, a financial services organization, we see that more than 50% of their customers are unreachable because of opt-outs. When you're not able to participate in a dialogue with consumers you're not able to increase that lifetime value. One CMO said something that I thought was great, “The minute consumers opt out I can't talk to them, but every one of my competitors can.”

DMN: What are some of the more effective email targeting strategies you've encountered?

Nicholson: One of the nice things about email is if you get it right it can be very effective. The steps marketers are taking include a regimented on-boarding process, which is not comprised of putting consumers into the hopper out of the gate, but instead listening first by collecting preferences. Marketers are collecting these preferences differently than they did in the past. They're now asking consumers to update preferences so that they state what's important and what they don't find important. When they put that strategy in place it affects the frequency and relevance [of emails]. If I can only send one email this week or month, what email should that be?

DMN: What customer data points should marketers focus on when planning email campaigns?

Nicholson: Before they start speaking about topics they think might be relevant they're asking [what's relevant] directly. That's the best thing organizations can do to start that relationship. They should also get rid of long subject lines and make them focused. The other good thing they can be doing is rethinking their opt-out strategy. When someone clicks unsubscribe, give them options and alternatives to opt out right in the landing page. Allow them to update preferences rather than just completing the opt-out. Make it easier for them to opt down rather than out.